G.R. No. 201944 - Bonifacio Communications Corp. vs. National Telecommunications Commission

On 16 October 1997, Bonifacio Communications Corporation (BCC) was incorporated by Bases Conversion Development Authority (BCDA), Fort Bonifacio Development Corporation (FBDC), and Smart Communications, Inc. (SCI).
The incorporators executed a Shareholders' Agreement granting BCC "the exclusive right to install, construct, own and maintain all the necessary Communication Infrastructure" and to provide related services, including Value-Added Services (VAS), within Bonifacio Global City (BGC).
FBDC and BCC entered into a Memorandum of Agreement (MOA) reiterating the foregoing provisions concerning BCC's infrastructure obligations and exclusivity.
By 2002, Philippine Long Distance Telephone Company (PLDT) acquired SCI's and FBDC's shares, owning seventy-five percent of BCC.
BCC's Articles of Incorporation and the Shareholders' Agreement expressly stated BCC would own and operate communications infrastructure and provide services including VAS within BGC.

On 13 May 2002, the National Telecommunications Commission (NTC) issued NTC Memorandum Circular No. 05-05-2002 (NTC MC No. 05-05-02) declaring BGC as one of the free zones where any duly enfranchised public telecommunications entity (PTE) shall be allowed to provide high-speed networks and connectivity.
Innove Communications, Inc. (Innove) received provisional authority in NTC Case No. 2004-027 to establish, install, operate, and maintain local exchange services subject to conditions, per an Order dated 17 June 2005.

In September 2007, Innove contracted to provide landline, data services, and internet connectivity to Net 1, 2, and 3 Buildings (e-Square) within BGC.
Innove's contractor disconnected a BCC conduit from an unused stub-out at Net 3, installed an Innove conduit, and ran Innove's fiber into the building after obtaining the building owner's permission.
Innove and Globe Telecom sought clarification from NTC on their capacities to install and operate telecommunications infrastructure in BGC and on the legality of BCC's and PLDT's claimed exclusivities.
NTC referred the queries to the Department of Justice (DOJ); DOJ Opinion No. 22, Series of 2008 declined to resolve the contract issues but advised that carriers cannot claim exclusivity in operation of public utilities and that private agreements cannot violate constitutional mandates.

On 12 September 2008, Innove filed a Complaint before NTC docketed as NTC Case No. 2008-236 seeking: affirmation of NTC MC No. 05-05-02; issuance of a Cease and Desist Order preventing BCC, PLDT and FBDC from removing Innove's facilities or preventing Innove from implementing services; permanency of the Cease and Desist Order after hearing; and removal of devices intercepting vacant cable entrances.
BCC and PLDT answered ad cautelam, contending: (a) NTC lacked jurisdiction over BCC because BCC was not a public service provider, enfranchised PTE, or unauthorized operator; (b) NTC lacked jurisdiction over the validity of the MOA and Shareholders' Agreement; and (c) NTC was precluded from further action by prior conclusions expressed in its letter to DOJ.
Innove filed its reply on 17 November 2008.

On 28 October 2008, NTC issued an Order directing respondents to strictly comply with NTC MC No. 05-05-02 and to cease and desist from acts that would prevent Innove from implementing and providing telecommunications service in BGC pursuant to the authorizations granted by the Commission.
BCC and PLDT filed a Joint Motion for Reconsideration ex abundanti cautelam.
On 26 October 2010, NTC denied the motion with finality for lack of substantial argument or compelling reason.

On 17 October 2008, BCC filed a civil case in RTC, Pasig (Taguig) for specific performance, contractual interference, injunction, and damages against FBDC, Globe, and Innove (RTC-Taguig Case).
On 17 October 2008, PL...(Subscriber-Only)

Whether the Court of Appeals correctly held that NTC had jurisdiction over BCC.

Whether the CA correctly affirmed the NTC Orders directing petitioners to comply with NTC MC No. 05-05-02 and to cease and desist from acts preventing Innove from providing telecommunications service in BGC pursuant to NTC authorizations.

Whether petitioners were deprived of due process because NTC allegedly prejudged the case based on its March 14, 2008 letter to the DOJ.

...(Subscriber-Only)